I don't totally agree with that scenario although it is one...

I don't totally agree with that scenario although it is one possibility, there are others equally as viable. The one thing I do agree one thing and that is that the destiny of SGH as an ASX listed company firstly and a company in existence secondly is currently in the hands of the US hedge fund.

I can't see the US hedge fund rushing in to a debt for equity conversion for any more than they need to and this will be determined by the amount of equity they need to secure sufficient control of the company and that is 25% plus 1 share or as I posted earlier about 27.5%. This translates I think to about 10m shares and at 75% of the current share price with a 25% discount comes to about $AUD10m (chicken feed in that world) they need to convert to get that control of SGH. The rest they can keep as debt with attached interest-bearing earnings and fees until such time as SGH proves it is out of the financial squeeze and any associated legal wrangles it has got itself into with the UK debacle on the back of declining earnings here. Then, they may seek repayment of the debt (full debt value not their discounted purchase price) which would highly likely trigger a VA as SGH doesn't appear to have or be able to generate the cash flow to pay the debt back any time soon or they could slowly convert small amounts of debt on a sliding scale to equity and then trade out over time.

Either way they wont be pushed into a deal by the likes of SGH, ABL, banks or other shareholders or anyone else unless something seriously wrong breaks and it ends up in the courts.